SHOULD Chinese investors choose to capitalise on the WA dairy industry they must align investment to the existing industry and make use of local farmer's specialised skills, according to Western Dairy board member and Busselton dairy farmer Ruth McGregor.
Speaking at the China Agribusiness Co-operation Conference last week, Ms McGregor said Chinese Investment in the WA dairy industry, particularly into the processing sector, was welcomed by WA dairy farmers.
But she said past foreign investment into the WA farm sector had been unsuccessful, due to a failure by investors to appreciate the skills of farmers in the WA environment.
"Over the past 10 to 12 years the WA dairy industry, like the agricultural industry has undergone a period of consolidation," Ms McGregor said.
"In the past six years we have seen that farmers have shown significant efficiency gains.
"Now in WA we see two thirds as many farmers producing almost the same amount of milk as we did six years ago.
"Unfortunately the WA dairy farmer efficiency gains on-farm haven't been followed with efficiency gains in the processing sector and therefore value gains haven't flowed back to the farmgate."
Providing a snapshot of the industry to a largely Chinese contingency, Ms McGregor said WA dairy farmers unique skill set for farming in the region was a significant strength.
"We have been refined down to the last 160 but now we have the absolute best left," she said.
"The low cost, high quality and stable supply could not be achieved without the specialised skills of our farmers.
"Dairy expertise is essential and skills are essential to profitable dairies."
In what she described as "The X Factor", Ms McGregor said WA farmers skill set was different to their counterparts in other States.
She said, like other States WA was a grass-based system, but its farm land did not grow grass for six to seven months of the year and water for irrigation was limited.
Ms McGregor said cow diets varied throughout the year and farmers carefully planned and transitioned for those changes.
"The pool of successful dairy farming skill set is rapidly diminishing in WA and has been through an intense period of refinement," she said.
"The level of refinement should not be underestimated."
Ms McGregor said a further strength in the WA dairy industry was the genuinely large opportunity for growth.
And while there was a large area of land suitable for grass based dairying in the State, expansion and development were hindered only by sufficient returns.
"Farmgate prices are barely keeping pace with the cost of production, you won't get cheaper milk in WA," she said.
"WA dairy farmers have been let down by the processing sector and it is this lack of value provided by the processing sector that has limited farm based expansions.
"We believe we have the capabilities and skills to produce a lot more milk.
"The farmers that remain here are the good ones, but we are in a holding pattern waiting for pricing signals to stimulate growth."
She said tremendous opportunities existed within the supply base to grow on-farm if appropriate price signals were passed on by the processors.
"Should improved value flow back to the farmgate existing dairy farmers and new entrants would be encouraged to develop expansions," she said
Further, she said with an improved and more efficient processing sector in WA, the dairy landscape could be vastly different to the present.
Ms McGregor said the WA supply was stable despite industry contraction and price fluctuations.
She said plentiful access to high quality grains and fodders from the Wheatbelt meant the industry could maintain stable herd numbers and milk supply even in poorer seasons.
She said local farmers had honed skills over decades to manage two feed transitions a year and balance feed rations during the six months without rains through the use of conserved feeds, fodder and grains.
Further, she said the use of annual ryegrass species during the growing season meant farmers grow large feed surplus in spring to be conserved as quality grass silage, sufficient for milking cow rations in dry periods.
Ms McGregor highlighted the quality of raw milk products in WA as a strength of the industry.
"The standard of this milk is amazing quality, it is what sets us apart from the other States," she said.
"More than 90pc of our raw milk is less than 250,000 bulk milk cell count.
"What is important to know about bulk milk cell count is that the lower the count the longer the milk can remain in its raw state.
"This combined with our strict biosecurity measures and food safety standards means that WA is a unique place to consistently supply a product suited to bulk milk export."
Ms McGregor said the whole industry worked to maintain systems of traceability and accountability throughout the food chain.
